10 ways that online banking can save you money

Posted on 7 November 2009

Other than the shear convenience of banking from the comfort of your home, here are 10 great ways that online banking can help you save money and maximise your savings:

  1. Low/no fees
  2. Earn higher interest
  3. Keep track of your account balance
  4. Set up bill payments in advance
  5. No queueing
  6. Maximise your interest
  7. Multiple savings accounts
  8. Keep a tight leash on your funds
  9. Diversify your investments
  10. Export and graph your transactions

Low/no fees

Most banks offer lower fees for online transactions than for writing cheques or doing your banking at the local branch. Online banks and special online accounts can go a step further, with no fees on some types of transactions.

Earn higher interest

Special online-only accounts generally offer higher interest rates than general purpose accounts.

Keep track of your account balance

The ability to log in and view up-to-date information on your bank accounts makes it easier to keep track of your expenses to ensure you don't accidentally send your account into the red (incurring high overdraft fees)

Set up bill payments in advance

Internet banking allows you to set up your bill payments in advance with payment at a future date - if you do this as soon as you receive a bill then there's no chance of missing a payment and being charged penalty interest.

No queueing

You know the old saying, time is money. By doing your banking online you don't have to spend time travelling to your local bank and queueing up for a teller. You've saved yourself time and also a little petrol money.

Maximise your interest

Keep most of your money in an online savings account and transfer over the amounts needed to pay bills just a day or two before the cash is needed. This allows you to earn high interest only nearly every dollar you own.

* this only works for banks that allow free online transfers between accounts, and be careful not to miss the transfer, else you could be hit by unauthorised overdraft fees.

* also, some banks calculate interest on the *minimum* monthly balance, so this wont earn you any extra interest on such accounts. Look for accounts that calculate interest daily.

Multiple savings accounts

Set up multiple savings accounts (with low/no fees) for different savings goals and transfer money into them each month on payday. This makes it easier to meet your savings goals and to ensure you have money for big purchases when you need it.

Keep a tight leash on your funds

Keep a low balance in your day-to-day account and put the rest of your money in an online-only account at a different bank. Without a cash card on the online account you wont be able to use it for spontaneous purchases and the low balance on your daily account will ensure you're careful to control your expenses.

Diversify your investments

By signing up for online banking combined with an online investment account you'll have an easy time diversifying your investments into funds and shares. Over the longer term this should allow you to earn a higher return on your investments.

Export and graph your transactions

Export your account transactions into cashbook software or excel and graph your expenditures to see clearly how much you spend and where you could save more. Pie charts present an amazingly clear picture where you spend your money.

We're sure there are many other advantages of online banking but this list of 10 money saving tips is a great start. Use online banking and take control of your finances!